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Superpower on the Skids

Collision of the Two Americas


Collision of the Two Americas


The American dream is turning into a nightmare, with disheartening levels of inequality, unemployment and homelessness. In this eyewitness report, CommonWealth Magazine visits the USA, in what may be its final days at the top.



Collision of the Two Americas

By Hsiang-yi Chang, Ting-feng Wu
From CommonWealth Magazine (vol. 485 )

Capitalism is facing unprecedented challenges.

Nowhere is the truer than in the United States, where unemployment has reached huge proportions, and across the country some three million people – the equivalent of 90 percent of Taipei City residents – are without a home.

Support for the "Occupy Wall Street" movement is growing rapidly, as protesters across the United States and around the world make a ruckus about the uneven distribution of wealth and the way the rich use their money to make more money.

Target No. 1 in the protests is the epitome of capitalism, the banking industry, and the governments that bailed out the banks with taxpayers' money during the last financial crisis.

The protesters began to occupy Zuccotti Park at the end of Wall Street in mid-September. When we visited in October the number of blue tents pitched in the park was still growing. To me the scene looked like a disaster zone. Sitting in front of a glitzy investment bank, a shabbily dressed homeless man held out his hand for a cigarette, while warning with a threatening look in his eyes that he does not want to be photographed.

But just around the corner white-collar workers sporting fashionable neckties pay the equivalent of NT$1,500 for a sandwich lunch at Trinity Place bar and restaurant. Housed in a remodeled old bank building, the restaurant is famous for its 70-centimeter thick, 35-tonne bank vault doors that deliberately create the impression of a bastion of iron.

Which impression is the true America? And why do people harbor such deep-seated anger?

Civil rights activist Martin Luther King moved the entire world with his "I have a dream" speech. But now the American dream has been shattered.

As part of CommonWealth Magazine's ongoing series examining countries around the world and the paths they have chosen to follow, we visited locales across the United States to report in-depth on the reality of the broken American dream.

We were eager to find out when, during the past thirty years, the world's only superpower made the crucial decisions that allowed a "winner takes all" mentality to take hold, so that today much of the nation's wealth is concentrated in the hands of the top one percent.

We were also asking ourselves which scenes and scenarios in this 30-year-long drama of Americans resisting Americans leave us with a strange feeling of deja vu. Haven't we already experienced similar situations in Taiwan?

Scene 1: Zuccotti Park, Downtown New York

It is Oct. 30, Sunday, at 6 a.m., and the "Occupy Wall Street" movement is entering its 44th day.

When it began to snow suddenly during the previous night, the New York City government seized the opportunity to confiscate generators and gas containers that had been used to warm up the protest camp. But as they had proclaimed earlier, the protesters did not leave. Instead, they defied the bitter cold. They began to pitch tents and tarps and brought in large cardboard boxes. Using jackets and blankets donated by supporters, they held out in the snowstorm as temperatures fell to five degrees Celsius below zero.

Surrounded on all sides by towering skyscrapers, Zuccotti Park, the heart of the "Occupy" movement, all of a sudden looks bleak and desolate.

Located in the midst of New York's bustling financial district in central Manhattan, the park is actually a stone-paved plaza with plenty of benches and trees. Usually, it is a popular oasis where Wall Street employees relax during a quick lunch break. Now, however, a tent city has sprung up populated by jobless people and other protesters.

Official figures put the U.S. unemployment rate at 9 percent, which is already a 30-year high. This means that 14 million people in the U.S. are out of work, about 60 percent of Taiwan's entire population. Real unemployment, however, is much worse than the official figures suggest. If the numbers also account for those who work part-time because they can't find full-time jobs and those who have given up looking for work altogether, the unemployment rate soars to 15 percent.

Running out of options, millions of Americans who have lost their homes and jobs are shouldering their few remaining belongings and camping out in parking lots, under bridges and highway overpasses.

"Tent cities" keep mushrooming across the country from California to Florida and glamorous New York in what could be called one of the biggest "new town movements" in American history. As we travel across the country talking to ordinary people and witnessing their plight, we can scarcely believe that this is America the "superpower."

"Healthcare for All, Jobs with Dignity, Quality Public Education, A Healthy Environment," reads the placard in the hands of 56-year-old "Occupier" Carol Brown. Wearing a friendly expression on her face, Carol looks like a benevolent auntie.

As she tells her story, her breath creates a white cloud in the cold air.

Carol used to be a civil servant with the New York State government, but was laid off last year. Since she was no longer able to pay the mortgage for her detached house in neighboring Connecticut, she moved in with her younger sister, sharing a small apartment of 40 square meters.

Then the "Occupy" rallies began on Sept. 17. Carol has not missed a single day of the movement since, always coming to Zuccotti Park in the mornings. In the afternoon she rushes across the bridge to Brooklyn, where for the next ten hours she works two part-time jobs: as a waitress in a fast food restaurant and a bookkeeper in a rental car company.

"They say the American economy is improving, that the unemployment rate is going down and GDP is growing. But I know they're all lying," Carol says matter-of-factly, leaving a deeper impression than if she was shouting. "Too many people like me have suddenly fallen from an ordinary, stable life into an abyss, with no work, no health insurance and no tomorrow. It's been a year, and I still can't see any hope."   

Friends have asked her why she takes the trouble to protest given that she works late into the night and does not even have enough time to relax at home. But Carol is convinced that people have to stand up for themselves now to demand what they deserve. "We were silent for too long," she says. "Now the time has come to stand up and fight."

Consultant Turns Cabbie

We meet another victim of the economic downturn at the Starbuck's coffeeshop next to Trinity Church just around the corner of Zuccotti Park. Thomas Ball, 60, is a former Wall Street executive.

Ball sports well groomed grey hair and a dark business suit. With his tall stature and an intelligent look on his face, he fits the stereotype of the high-flying executive from Wall Street or powerbroker from Washington.

For a short period, Ball worked as a taxi driver, but before that he was a supervisor at global management consulting firm McKinsey and Company.

A graduate of New York University's Stern School of Business, Ball held high-level management positions at Citibank and American Express before joining McKinsey. Around 2007 Ball decided to leave the consultancy after more than 10 years on the job to found a hedge fund with friends. Backed by decades of experience in the financial industry, the future seemed to look bright for Ball's business venture. But then, out of the blue, the financial crisis hit, turning the tables on him.

Like tens of thousands of other Americans, Ball has gone through dramatic changes in his professional career and personal life during the past three years. After the subprime mortgage crisis hit, his fund not only failed to raise any money, but actually lost almost a million dollars on its initial investment positions, thanks to leveraged speculation, Ball recalls painfully.

So Ball was forced to look for a job on Wall Street again. Hit by the financial crisis, Wall Street was, however, firing rather than hiring. As a specialist in quantitative analysis, Ball was still able to land jobs with Merrill Lynch and other investment banks, but only for less than half of his old salary.

Half a year into his new job, Ball was let go without prior warning. "All of a sudden the world as I knew it no longer existed," Ball recalls. His career and his plans for retirement had completely gone awry.

As his life and finances hit rock bottom, Ball hung up his business suit and began to drive a cab, leaving his familiar social circle behind. He needed the money to pay the mortgage for his luxury apartment in central Manhattan and tuition for his daughter who attends a special education school. All he could think of was how to pay the bills and make ends meet each month.

But in the end Ball was still not able to keep his downtown apartment and moved to Queens instead. Meanwhile, he has found another job with a consulting firm, and is now making a new start in life.

Scene 2: Hoboken, New Jersey

In Lower Manhattan across from the PATH station where trains arrive and depart for the opposite shore of the Hudson River, "Liberty Tower" is now rising from the ruins of the World Trade Center.

"The more a country verges on bankruptcy, the more obsessed it becomes with constructing huge buildings. What we've seen in Dubai, we're seeing in America now," says 36 year-old Larry Livs.

Livs manages a restaurant on Water Street in Manhattan. A New Jersey native, he came to the "Big Apple" 12 years ago in pursuit of his American dream.

Between 2003 and 2007, when U.S. equities and property markets were surging and the cash was fast and loose, Livs had a momentary illusion that "his ship had come in."

He and some friends pooled some capital they had gained from working part-time and investing while they were in school, and they were hoping to open a little hotel downtown.

"The banks told us no problem, piece of cake," Livs says.  "Just put together 10 percent down and they'd take care of the rest."

A thriving American economy built on hot money, financial derivatives and highly leveraged property turned Livs from an ordinary young person to a seemingly successful new player in the hotel business.

He mortgaged the hotel to finance the opening of a new restaurant in trendy Chelsea and also rented a spacious apartment in the area. The cash poured in from all sides, and along with it the sports car, the women, and the wild parties night after night.

"And you know what happens next – a return to the cruel reality of the world as it is," Livs says.

The train enters the station and 15 minutes later we're pulling into Hoboken. The blustery day amplifies the bleakness of the riverfront town where the unmarried Livs now shares a cramped apartment with his mother and his son.

Livs' Puerto Rican mother gives him a big hug and smiles bashfully at us.

"My son works hard, and he's smart. But he's not as smart as the banks. He got cheated," she tells us in not entirely fluent English.

"Now my mom won't even let me deposit my salary in a bank because she was terrified when the bank repossessed our house," he says with a rueful laugh. Up until this moment he has seemed almost to be telling someone else's story, yet now his eyes are suddenly red-rimmed.

Sitting beneath a portrait of his father, a military veteran who died at a young age, Livs becomes pensive. Perhaps he, along with tens of millions of other American young people, still has the strength and fortitude to continue his pursuit of "the American dream." What no one seems able to answer, however, is whether that dream still actually exists.

Scene 3: Midtown Manhattan, St. Bartholomew's Church

At around 11 a.m., historic St. Bartholomew's Church on Park Ave. begins its midday relief effort. In one corner of the church, clergy and volunteers serve up piping hot bowls of vegetable soup and bread to fill the bellies of the local street people.

At a side entrance to the church, 20 or so street people are lined up single file ready to get their daily bread. Smartly dressed midtown office workers file past virtually holding their noses.

"Welcome, friends! Welcome to the world's greatest and most beautiful church," a somewhat shabbily dressed man named Randy Jackson beckons to us with outstretched arms, his long, unkempt salt-and-pepper beard fluttering in the wind.

"I had a home once and a little truck I used to use to deliver shrimp to chain supermarkets. The money wasn't bad. But three years ago, as you can see, I became a street person and now my home is here," Jackson says, pointing to a pile of cardboard boxes and blankets in a nook outside the church.

"I still remember how three years ago – the boss comes up, hands me a check, says the company's going out of business and wishes me luck," Jackson recalls. "I thought, no problem, I'll get another job. Who knew nobody would be hiring? Everyone was laying people off. No one was looking for people."

Jackson points to a group of street people squatting alongside the church: "Same with them. More and more like us everyday."

"These things are facts that our government should take very seriously," asserts Brendan O'Flaherty, an economics professor at Columbia University who has dedicated more than a decade of his life to researching issues of homelessness in the U.S. "I'm afraid that the number of both temporary and chronically homeless across the United States is hitting a historical high."

The most recent official figures place the number of homeless people at more than two million.

In other words, in the United States, viewed by so many as a "promised land," one out of every 150 people is homeless, O'Flaherty says, even though he believes the official figure is far too low.

"I'm not cynical or prejudiced against my own government, but you can quote me on this," the white-haired, gold bespectacled professor says. "When three million people, one percent of the whole population, are living on the street or in tents, people will no doubt ask: 'What's the Goddamn problem with this country?'"

Scene 4: Demonstrators Shut Down Port of Oakland

On November 3 a crowd of around 5,000 protestors calling for a "general strike" block the gates of the normally bustling Port of Oakland. Protest banners and soapbox speakers can be seen in all directions as row upon row of shipping containers and cranes stand idle.

The city of Oakland has the Bay Area's highest unemployment and crime rates and relations between the police and residents are tense. Oakland was also the site of the first casualty of the nationwide "Occupy" movement.

To avoid further bloodshed, riot police have pulled back, and the protestors, claiming to represent "the 99 percent," have come prepared this time.

"Look at this phone number on my arm. That's the number of the National Lawyers Guild. If the police come at us again, I'm calling it," said one Caucasian woman, showing us her arm.

The entire port area resounds with the hubbub of humanity.

"We are the 99 percent, and about 99 percent of us have never been here before."

"What gives banks the right to buy out our country? Who has the right to tell us we're just out of luck?" an ad-libbing singer croons to the wild delight of the throng.

"I'm a nurse, so I still have a job, thanks mostly to the support of the nurse's union. But my neighbor's house has been foreclosed and the local library is closed," says one woman in response to our questions. "Where is the hope for the next generation?"

Across town, in the midst of the tent city that has sprouted in Oakland's Frank H. Ozawa Plaza, a young black man sidles up to us, asking for a cigarette. He declines to give his name, saying only that he works part-time at a hotel around the corner.

"Service workers here receive only minimum wage, and the work is not very steady. So even if you have work, you can't escape poverty," says Jennifer Lovewell of the Western Service Workers Association, who is handing out pamphlets proclaiming the simple message: "Heating or Eating? We Need Both."

The previous day the "Occupy" movement had kicked off a drive encouraging people to withdraw their money from banks and deposit their savings in non-profit credit cooperatives.

This consumer boycott movement now claims credit for forcing Bank of America's announcement that they would be canceling monthly processing fees of US$5 on client accounts effective next year.

U.S. President Barack Obama's campaign slogan this time around has gone from "Hope and Change" to "We Can't Wait." Prominently displayed in his campaign offices is his "jobs plan," which the president is urging the public to support to end continued Republican obstruction to his "Job Creation Act."

But the protesters are anxious for even more and are not satisfied with small steps and shows of good faith, be they banks backing down or Obama's jobs plan.

This time they want to get to the root of the problem and write the prescription themselves, rather than relying on the people who created the problems to offer a solution.

Additional research by Jin Chen and Shu-ren Koo

Translated from the Chinese by Susanne Ganz and Brian Kennedy